PROMISSORY NOTE

$1,750,000.00                                                         LEHI, UTAH
                                                                January 26, 2001


         FOR VALUE RECEIVED, Gerald M. Larson (hereinafter referred to as
"Maker"), promises to pay to the order of Headwaters Incorporated, a Delaware
corporation, or to its successors and assigns (hereinafter referred to as
"Lender") the principal sum of One Million Seven Hundred Fifty Thousand Dollars
($1,750,000.00) together with interest on the unpaid principal balance
outstanding from time to time, all as hereinafter set forth.

         Interest shall begin to accrue as of January 1, 2001 on the principal
amount outstanding from time to time until and after the maturity hereof
(whether by stated maturity, acceleration or otherwise) and shall be payable at
the rate of six percent (6%) per annum simple interest based on a three hundred
sixty (360) day year comprised of twelve (12) thirty (30) day months.

         The entire balance of principal and accrued interest shall be due and
payable in a single balloon payment on or before December 31, 2003.

         Payments of both principal and interest shall be paid in lawful money
of the United States of America in immediately available funds at such place as
Lender may from time to time designate. Except as otherwise provided in this
Note, if any payment of principal and/or interest due hereunder is not paid
within thirty (30) days after its due date ("Payment Default"), Maker shall pay
to Lender on demand a late charge equal to five percent (5%) of the amount of
such payment. Upon Payment Default continuing for ten (10) days after written
notice is given by the Lender hereof to the guarantor to cure the Payment
Default, then the entire unpaid principal sum and accrued interest due shall
become immediately due and payable. To the extent permitted by applicable law,
all amounts which are not paid when due as provided in this Note shall bear
interest at ten percent (10%) per annum, simple interest payable monthly.

         The prompt payment and performance of this Note is guaranteed by Larson
Holdings, Inc. This Note is secured by all of the outstanding common shares of
Larson Holdings, Inc. and the guaranty is secured by all of the outstanding
common shares of Larson Limestone Company, Inc. pursuant to a Stock Pledge and
Security Agreements of even date (the "Security Agreements").

         This Note may be prepaid in whole at any time or in part from time to
time without premium or penalty. Notwithstanding anything herein to the
contrary, the entire balance of principal and accrued interest shall become
immediately due and payable upon the occurrence of any one or more of the
following events:

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<PAGE>

         (i)      The sale of all or  substantially  all of the assets of Larson
                  Limestone Company, Inc. ("Limestone"), or the sale or transfer
                  (voluntarily  or  by  operation  of  law)  of  any  shares  of
                  Limestone or interest in shares of Limestone  now or hereafter
                  held by Larson Holdings, Inc. ("Holdings"), or the issuance of
                  additional  shares  by  Limestone  to any  person  other  than
                  Holdings,  or the merger or consolidation of Limestone with or
                  into  another  entity.  Notwithstanding  the above,  this Note
                  shall  not  accelerate  upon (a) the  grant to  Lender  of the
                  security interests in the Limestone shares contemplated by the
                  Security  Agreements,  (b) the grant (but not the realization,
                  foreclosure  or  execution)  of a  security  interest  in  the
                  Limestone  shares granted to third parties to secure bona fide
                  debt subject to the Security Agreements, or (c) the grant (but
                  not the  realization,  foreclosure or execution) of a security
                  interest  in  Limestone  assets  granted  to third  parties to
                  secure bona fide debt or bonding.

         (ii)     The  sale  of  all or  substantially  all  of  the  assets  of
                  Holdings, or the sale or transfer (voluntarily or by operation
                  of law) of any shares of  Holdings  or  interest  in shares of
                  Holdings  now or hereafter  held by Maker,  or the issuance of
                  additional  shares by Holdings to any person other than Maker,
                  or the merger or  consolidation  of Maker with or into another
                  entity.   Notwithstanding  the  above,  this  Note  shall  not
                  accelerate  upon  (a) the  grant  to  Lender  of the  security
                  interests in the Holdings shares  contemplated by the Security
                  Agreements,  or  (b)  the  grant  (but  not  the  realization,
                  foreclosure  or  execution)  of a  security  interest  in  the
                  Holdings  shares  granted to third parties to secure bona fide
                  debt, subject to the Security Agreements.

         (iii)    Any  default by Maker or  Holdings  pursuant  to the  Security
                  Agreements  after the  expiration  of any notice  periods  and
                  opportunities to cure expressly stated therein.

         All payments hereunder shall be applied first to the payment of accrued
and unpaid interest and the balance to the payment of principal.

         Maker agrees to pay to Lender, and reimburse Lender for, any and all
costs and expenses, including reasonable attorneys' fees and court costs, if
any, incurred by Lender in connection with the enforcement or collection hereof,
both before and after the commencement of any action by Lender. Maker and all
guarantors waive presentment, protest and demand, notice of protest, notice of
dishonor and nonpayment of this Note and expressly agree that this Note or any
payment hereunder may be extended from time to time without in any way affecting
the liability of Maker or such guarantor hereunder.

         The rights and remedies of Lender hereunder and under the Agreement
shall be cumulative and concurrent and may be pursued singularly, successively
or together at the sole discretion of Lender, and may be exercised as often as
occasion therefor shall occur, and the

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failure to exercise any such right or remedy shall in no event be construed as a
waiver or release of the same or any other right or remedy.

         In the event any provision of this Note (or any part of any provision)
is held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note; but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had not been contained in
this Note, but only to the extent it is invalid, illegal, or unenforceable.

         This Note, having been executed and delivered in the State of Utah, as
of the date first written above, is to be governed by, construed under and
enforced in all respects according to laws of the State of Utah, excluding its
principles of conflicts of laws.

         IN WITNESS WHEREOF, the Maker has executed this Promissory Note the
date and year first above written.

                                                     /s/ Gerald M. Larson
                                                     --------------------------
                                                     Gerald M. Larson

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                                    GUARANTY

         The undersigned  Larson Holdings,  Inc. hereby guarantees to Headwaters
Incorporated,  its successors and assigns, the prompt payment and performance of
the  foregoing  Promissory  Note of  Gerald M.  Larson.  This is a  guaranty  of
performance,  and accordingly  the Lender need not exhaust its remedies  against
Maker before proceeding on this Guaranty. This Guaranty is secured by all of the
outstanding common shares of Larson Limestone Company,  Inc. pursuant to a Stock
Pledge and Security Agreements of even date.

         Dated this 26th day of January, 2001.

                                                     LARSON HOLDINGS, INC.


                                                     By  /s/ Gerald M. Larson

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